What is the difference between commodity swap and commodity forward? As they look apperently the same.
swap is an exchange e.g. you could pay the return on LIBOR + 200 bps and receive the return on Natural Gas . You are trying to lock in a return one way or another . If you own a return on one item , yet you feel that the item ( be it a rate , commodity , index whatever ) may underperform , you are lessening the risk of the loss.
A forward would be a committment to buy , ie. pay cash for a delivery in the future . You lock in a rate or price. A hedger ( producer or consumer ) would lock in a price when they are producing something or expecting to consume something in the future .
Similar , yet slightly different.
Commodity swap is like a series of commodity forwards which have the same forward price.